Posco Holdings, the holding company of South Korean steel giant Posco Group, announced that it will divest its entire share in Nippon Steel. The company stated that while the strong partnership between the two steelmakers will continue, no final decision has been made on the timing and method of the sale.
According to Posco's business report, the KRW 467 billion (USD 321 million) worth of shares in Nippon Steel are classified as “assets held for sale”. The company stated that this decision was made as part of a value enhancement strategy, including obtaining cash analysis.
The development follows Nippon Steel's decision in September to sell its share in Posco Holdings, which it earned in about 1.1 markets (USD 756 million), as part of its plan to buy US steelmaker US Steel for USD 14.9 billion.
Historical Link between Posco and Nippon Steel
The cooperation between Posco and Nippon Steel began in 1968 when the Japanese company provided technical and financial support for the construction of Posco's Pohang Steelworks. The two companies acquired it in the early 2000s to boost their alliance.
Commenting on the matter, a Posco official explained, “Initially, mutual feelings were bought as a hedge against hostile offenses. However, since there is no longer a need for such a cut, we decided to sell the shares while preserving our backlog,”
Posco's move comes at a time when it is focusing on portfolio management by major players in the steel industry.
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